26. Page 4-4
4. Key Attributes
Private Jet Travel: Understanding the Options
Complexity encompasses the degree of time, money and other resources
required to engage the services of a business aviation program. With some
offerings you would be wise to have either a high industry competence level or
retain the services of advisors to assist you with the transaction.
Charter. Charter is the least complex option. While a little more complex than
buying a commercial airline ticket, your “reservation” process should be painless
Block Charter. Block Charter requires you to enter into a more complex contract,
outlining the program’s fees and services. It is usually, however, one document
and is relatively straightforward.
Fractional. Fractional programs require you to execute fairly complex
agreements. You should consider tax implications (depreciation, passive loss
rules, state sales and use tax) any time you own an interest in an aircraft, such
as in Fractional. You might need to consider accounting (e.g., balance sheet)
and disclosure requirements. And you should consider strategies for limiting
liability associated with the ownership and operation of aircraft.
Block-Frax. Block-Frax programs require that you enter into a set of agreements
that are derivative of Fractional and as such, fairly complicated. But you do not
own the asset and therefore the complexity level is reduced compared to
programs where you do obtain title.
Ownership. Acquiring a turbine aircraft is a sizeable business transaction.
Selection requires thorough analysis and expertise. The acquisition and
financing/lease transactions themselves can be fairly complex. Ownership
implies the need to consider tax, accounting and liability matters and perhaps
disclosure requirements. As operator, you will have to comply with aviation
regulations, and you might choose to establish an internal flight department or
contract for those services with a third party (the latter being a fairly
For some, access to a consistent air travel experience is a major consideration in
their move to business aviation. Consistency can be measured in terms of
access to the same or virtually identical aircraft or crew/ground support staff that
over time become familiar with your needs. Further, the ability to “personalize”
an aircraft to reflect one’s own tastes or to portray a certain image is important for
some business aviation users. This customization could include paint scheme,
interior configuration, and onboard items with custom logos. Consistency also
encompasses operational consistency – setting and sticking to strict standards
for pilot selection and crew training, maintenance, flight planning, dispatch and
scheduling. The most critical aspect of consistency, though, is probably the
degree to which the quality of the overall product delivery is met flight after flight.
Charter is very
Block Charter has
a simple contract
Independent Source: Deloitte Private Wealth, Private aircraft: Flying private makes sense for those with the right information (page 20)
*This website has no affiliation with Deloitte.